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Friday, November 7, 2008

Gnome-o-gram: The Harvard MBA Indicator

For decades, it's been a common observation that whenever the graduating MBA class from the Harvard Business School overwhelmingly opts for jobs in a given industry, that sector may be a bubble ready to pop. In essence, if you want to know what “the last big thing” is about to be, just look at where the aspiring masters of the universe are choosing to commence their careers.

Below is the industry breakdown for the Harvard MBA Class of 2007 (the most recent for which figures are available) from this MBA Program Statistics report published by the School.

  Industry (Class of 2007)     %     Median Base Salary  
 Manufacturing    17%   $105,000
 Financial Services    44%   $115,000
 Consulting Services    21%   $120,000
 Other Services    4%   $110,000
 Non-Profit    2%   $90,000
 Government    <1%   $60,000

This was the last Harvard MBA class to graduate and take jobs before the present debt liquidation crisis began to hit the financial sector in the latter half of 2007. Note that the 44% of graduating MBAs entering the financial sector was about twice the fraction that the financial services industry makes up of the U.S. GDP, an obvious (and in retrospect prophetic) overweighting.

It will be interesting to see how this breakdown evolves as the grand deleveraging progresses. In particular, with the anticipated change of direction in Washington, I'll be fascinated to see if, despite the disparity in starting salaries, more Harvard MBAs opt for the public sector, perceiving government as “the next big thing”.

Other gnome-o-grams

Posted at 21:32 Permalink